The current level of grant funding in Scotland is a
fantastic opportunity for Housing Associations to drive up the
delivery of new affordable homes. With a target of 50,000 new homes
in the current parliamentary period we should be looking back in 4
years with a sense of satisfaction that we have done all we can to
deliver more homes for people who need them.

The current focus is on how to hit that target, which includes
35,000 for social rent and 15,000 across other
tenures. Housing land supply, availability of finance,
development knowledge and capability within the sector and the cost
of land and construction are just some of the thorny issues we are
trying to resolve. But as we focus on the here and now, we also
need to lift our heads up and think about how we will continue to
deliver in the future.

Housing need analysis indicates that the demand for affordable
housing far exceeds the 25% assumption made for new build
developments. This is spread across a range of house sizes and
income levels and every tenure has a role to play. With the average
wage in Scotland at around £28,000 and even with a loosening in the
mortgage market, a quick scan of available homes to buy indicates
that the rental market is going to have to increase
supply.

Institutional investment in affordable rent is one avenue for
future growth that could continue well beyond the current grant
regime. In Scotland the Falkirk Pension Fund and Castle Rock
Edinvar have been delivering social rent and mid market rent with
much lower public subsidy. The advantage of an institutional scale
programme is that it is easier to resource with the right
development and financial management skills,anditcreates a simpler
portal for house builders and developers when they are looking to
deliver affordable homes. The upside for Housing Associations
is that they can grow their offering to customers, increase the
efficiency and productivity of their housing and home repair
services and grow their revenue base.

One of the big challenges for Housing Associations will be
re-thinking their role and approach to housing management, cost
control and delivery of services. If we are to continue to increase
the supply of affordable housing well beyond the current programme
then everyone is going to have to identify how we drive more value
out of our investment and resources.

For now, the opportunity to increase supply is better than many
of us could have expected. It won't be long before we have to
live with less public subsidy and so now is the time to think ahead
and be ready to adapt without comprimising the need to deliver
significantly more affordable housing.